July 10, 2019 / 4:58 PM / 10 days ago

German minister to discuss aircraft subsidies with USTR Lighthizer

WASHINGTON (Reuters) - German Economy Minister Peter Altmaier said he would meet with U.S. Trade Representative Robert Lighthizer on Thursday to discuss efforts to settle a dispute over subsidies to U.S. planemaker Boeing (BA.N) and Europe’s Airbus (AIR.PA).

German Federal Minister of Economic Affairs and Energy Peter Altmeier speaks at an event hosted by the German Marshall Fund, in Washington, D.C., July 10, 2019. ÊREUTERS/Jonas Ekblom

Speaking later at a think tank event, Altmaier said he would be open to eliminating all government subsidies to Airbus, as long as the United States was willing to do the same with Boeing.

“I could perfectly go along with ... we will no longer provide any subsidies on both sides. Then it is just competition and nothing else,” he told an event hosted by the German Marshall Fund.

The World Trade Organization has found that both Boeing and Airbus, the world's two largest planemakers, have received billions of dollars of harmful or illegal government subsidies here to gain advantage in the global market.

The United States and the European Union have threatened to impose billions of dollars of tariffs on each other, with Washington first in line to seek tariffs under the WTO timetable.

“In our view it is in the interest of both sides to avoid these tit-for-tit tariffs,” Altmaier told reporters earlier in the day.

The EU last week said it remained open to negotiations to settle the disputes “provided these are without preconditions and aim at a fair outcome.”

Washington had signaled its openness last month to working on an enforceable mechanism to govern government subsidies for aircraft production, a move that could pave the way for resolving a dispute which has taken up thousands of pages of rulings over the last nearly 15 years.

Altmaier told reporters he had a “productive and constructive” meeting with U.S. Treasury Secretary Steven Mnuchin, and the two sides discussed how to reduce global tensions, ease trade disputes and maintain jobs in both Germany and the United States. He is due to meet with Commerce Secretary Wilbur Ross on Thursday.

Altmaier said it was positive that trade tensions between Europe and the United States had not spiked over the past year, since European Commission President Jean-Claude Juncker and U.S. President Donald Trump agreed to start talks. He said he thought it was possible to avoid escalation by tackling each of the many disputes on the table one by one.

Altmaier said he and Mnuchin discussed a range of issues including possibly boosting liquefied natural gas exports from the United States to Europe, sanctions against Iran and other countries, and prospects for intensifying cooperation on the issue of Ukraine and gas transfers.

“We are in the middle of intensive discussions. For me, the Americans remain partners and friends despite our disagreements,” he said.

Altmaier cited great concern about recent developments in Iran and said Europe and the United States should work together to find ways to deescalate the situation.

All parties share an interest in ensuring that Iran returns to upholding the spirit and the letter of the 2015 nuclear agreement, he said. “Nothing else makes sense. Nothing else is in the interest of international stability,” he said.

European powers accused Iran on Tuesday of “pursuing activities inconsistent with its commitments” under the deal and called for an urgent meeting of the parties to the agreement to discuss Tehran’s compliance.

Britain, Germany, France, Russia, China and Iran are the remaining parties to the deal, known as the Joint Comprehensive Plan of Action, which was abandoned by the United States last year.

Reporting by Andrea Shalal; Editing by Cynthia Osterman and Leslie Adler

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